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Due Diligence Investigation ¨C The
Compass for Business Operation
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Commercial risk
exits everywhere in modern commercial activities and is a common occurrence
especially in international trade and investment business. Therefore parties
engaged in international business activities need to keep higher vigilance and
to conduct due diligence of opposite side before making any significant business
decisions to avoid deadweight loss.
Not long ago, a company of a province in China prepared to co-establish a joint
venture with an American company by investing RMB 2.47 million for purchasing
equipment from a supplier designated by the foreign side. The American company
provided an original business license affixed with a stamp of Ohio State
Government, an ¡°AAA grade¡± due diligence certificate issued by a famous bank and
notarial certificate. However, when checking these documents, lawyer in charge
found the names of the American company in two of the documents had a little
difference in one alphabet, which attracted the attention of lawyer. After
comprehensively considering the American company¡¯s provided documents and its
brief introduction, the lawyer felt this company might forge part of its due
diligence and suggested the Chinese company conduct a full due diligence
investigation on this American company. The Chinese company agreed and entrusted
this assignment to investigation office.
The investigation office carried out a full investigation on American company¡¯s
registration information, actual business, communication and credit through
cooperating with oversee office of China Council for the Promotion of
International Trade, foreign law firm and investigation office. The
investigation result showed that the provided business license of American
company was forged and there¡¯s no such a company in Ohio, America, while that
designated equipment supplier was not a German company¡¯s solely-invested company
in China as the American company described, but a company, invested by a Chinese
of foreign nationality, with no investment capital in place and even the fee for
renting business place unpaid.
Obviously, the American company and that equipment supplier had the intention of
fraud together. The investigation office immediately submitted a due diligence
investigation report based on the information returned from various channels and
suggested the Chinese company should not remit money to that equipment supplier.
As soon as the Chinese company received the report, it at once stopped the bank
to transfer the money and reported that American company to the local public
security department, which arrested a fraud suspect in a short time. The suspect
confessed they indeed was a gang who made forged company registration
certificate to organize fraudulent activities. They had succeeded in fooling
companies in China for three times. The suspect also confessed other
confederates who were wanted for arrest. Thanks to the investigation office¡¯s
carefully and delicate work, which not only made this fraudulent scheme gave the
trick out and rescued 2.47 million Yuan¡¯s loss for the Chinese company and was
appreciated by it, but also cracked down on criminal activities using the name
of international trade and business.
Generally, the due diligence investigation report provided by investigation
office contains company summary (including address, date of establishment, legal
representative and so on), financial status, public records, court records,
contacts with bank, company background, business scope, business operation,
important evaluation, etc. Other items are also available by special
investigation.
In addition, investigation office also makes company¡¯s due diligence open to the
public, which can improve company¡¯s reputation. Value evaluation for mechanical
equipments, market investigation and so on are also within the services of
investigation office.
Source: http://www.365report.com/order/orderview43420.htm
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¡°Fake Fingerprint¡± Chinese Woman Fools
Japan Controls
All foreigners are fingerprinted when they arrive in Japan. A Chinese
woman managed to enter Japan illegally by having plastic surgery to
alter her fingerprints, thus fooling immigration controls, police claim.
Li Rong, 27, had previously been deported from Japan for overstaying her
visa. She was only discovered when she was arrest on separate charges.
Tokyo police said she had paid $15,000 to have the surgery in China.
It is Japan¡¯s first case of alleged biometric fraud, but police believe
the practice may be widespread. Japanese police suspect Chinese brokers
of taking huge sums to modify fingerprints surgically.
Local media reports said Ms. Lin had undergone surgery to swap the
fingerprints from her right and left hands. Skin patches on her thumbs
and index fingers were removed and then re-grafted on to the matching
digits of the opposite hand. Japanese newspapers said police had noticed
that Ms. Lin¡¯s fingers had unnatural scars when she was arrested last
month for allegedly faking a marriage to a Japanese man.
The apparent ability of illegal migration networks to break through
hi-tech controls suggests that other countries who fingerprint visitors
could be equally vulnerable ¨C not least the United States, according to
BBC Asia analyst Andre Vornic.
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